Notice - Conversion of Structures (2016-12-23)

Summary

This Notice from the Bermuda Monetary Authority explains new legislative provisions allowing certain Bermuda legal entities to convert from one structure to another (for example, an exempted company converting to an exempted limited partnership, or a company converting to a limited liability company). It sets out how entities should apply for the Authority's required consent to such a conversion and what supporting information must be provided.

• Legal basis: Conversion rights arise from amendments to the Companies Act 1981, the Limited Partnership Act 1883, the Exempted Partnerships Act 1992, and the Limited Liability Company Act 2016.
• Conversions covered: Exempted company to exempted limited partnership and vice versa; company (exempted or local) to limited liability company (exempted or local) and vice versa; exempted limited liability company to exempted limited partnership and vice versa.
• Authority consent required: The Authority's consent is required for any conversion regardless of the Registrar of Companies' involvement.
• Application method: Applications for consent must be submitted by letter to the Corporate Authorisations Department, accompanied by the prescribed application fee under the relevant Act.
• Information required: Full pre-conversion and post-conversion ownership structures (including direct, intermediate and ultimate beneficial owners and personal declaration forms), a description of the new entity's proposed activity, a statement on physical presence in Bermuda, registered office address and registered representatives, and any other useful information.
• Outcome notification: The Authority will confirm the outcome by email, including confirmation of non-resident designation and exchange control considerations where relevant.
• Schedule 1 filings: Schedule 1 to the Notice lists the additional statutory documentation (e.g. certificates of conversion under specific sections of the CA, EPA and LLCA) required for each specific type of conversion.

The Notice is informational and procedural, clarifying application requirements rather than introducing new substantive obligations beyond the underlying statutes; entities considering a conversion should follow the described process and consult the Department of Licensing and Authorisations with questions.

Key obligations

• Entities seeking to convert their legal structure must obtain the Bermuda Monetary Authority's consent regardless of the type of conversion or the Registrar of Companies' involvement
• Applications for the Authority's consent must be submitted by letter to the Corporate Authorisations Department, accompanied by the requisite application fee prescribed under the relevant Act
• Applicants must provide full pre- and post-conversion ownership structures, including direct, intermediate and ultimate beneficial owners, and completed personal declaration forms for individuals
• Applicants must provide a description of the proposed new entity's activity, a statement on physical presence in Bermuda, the registered office address and names of registered representatives
• Applicants must file the additional statutory documentation specified in Schedule 1 for the specific type of conversion sought, such as certificates of conversion containing prescribed statutory particulars

Applies to

Bermuda Exempted Companies, Bermuda Local Companies, Bermuda Exempted Limited Partnerships, Bermuda Exempted Limited Liability Companies, Bermuda Limited Liability Companies (Exempted or Local)